The Single-period Cost Variance Investigation Decision

Abstract

Alston Glassworks uses a small electric arc furnace for fusing silica. When the air vents on the furnace are properly open, its electricity cost takes the form of a normal distribution with a mean of £2200 per week and a standard deviation of £400; when the vents are not properly open the furnace’s electricity cost again takes the form of a normal distribution, but with a mean of £2800 per week and a standard deviation of £1400.